Gold Forecast: Gold & U.S. Stock Market Update

Chief Analyst & Editor @ Goldwavetrader
June 5, 2022

gold forecastRecapping Last week

Last week's trading saw Gold holding weaker into mid-week, here dropping down to a Wednesday low of 1830.20. From there, however, a sharp rally was seen into late-week, with the metal hitting an early-Friday high of 1878.60 - before backing off the same to end the week.

Gold's Cyclical Picture

For the short-term picture for Gold, the last smaller-degree correction came from the 10-day cycle, dropping into last Thursday's low of 1830.20 - before turning back to make higher highs for the swing into early-Friday. Here again is our 10-day wave:

Stepping back, the bigger rally phase is coming from the 72-day cycle in Gold, which we see as heading higher in the coming weeks - then to form either a countertrend top, or else could muster a marginally higher high, above the early-March peak.

Here again is our 72-day cycle component:

In terms of patterns, the probabilities favored the recent correction phase of the 10-day wave to end up as a countertrend affair, due to the configuration of the bigger 72-day cycle. In terms of time, the overall path is looking for continued strength in the coming weeks, coming from the upward phase of this 72-day component.

In terms of time, the overall assumption is that the upward phase of the 72-day cycle is looking for strength into the early-July timeframe or later, before turning sharply lower into late-Summer to early-Autumn, where an even-larger low will be coming due, with a bigger 310-day component:

With the above said and noted, the current upward phase of the 72-day cycle should form what now looks to be a countertrend peak in the days/weeks ahead, before turning sharply lower into the August - November timeframe.

That move down into August - November will eventually trough the larger 310-day cycle component, for what would be expected to be a much larger rally - something in the range of 25% off the lows, and lasting into the Spring of 2023 or later.

U.S. Stock Market Update

In looking at U.S. stocks - as measured by the S&P 500 index (or 'SPX') - the short-term picture is being dominated by the 45-day cycle, which is shown on the chart below:

This 45-day cycle is seen as pointing higher off a late-May price trough on the SPX. In terms of time, the average rally phases with this wave - when coming off the pattern of a ‘lower-low’ - have lasted around 25 trading days before peaking. If seen here, then the inference is that its current upward phase will hold up into mid-to-late June, before its next peak forms.

In terms of price, the 70-day moving average is looking to be an ideal upside magnet in the coming weeks, before topping this 45-day cycle in what is anticipated to be a countertrend affair. If correct, another sizeable decline will likely follow on its next downward phase, one that will either take the SPX to a marginal new low for the bigger swing - or else some hard secondary/re-test low.

Mid-Term View for U.S. Stocks

The last larger-degree peak for the SPX was the early-January peak of 4818.62, which was the last high for the combination of 180 and 360-day cycles. The smaller 180-day component is shown on the chart below:

The next mid-term low for U.S. stocks is expected to come from the combination of 180 and 360-day cycles. Until proven otherwise, the overall assumption is that the current upward phase with the smaller 45-day cycle will end up as a countertrend affair, giving way to lower lows - before bottoming the larger two waves.  

If the above is correct, then we will see the current swing higher holding below the late-March peak of 4637.30 SPX CASH, and with key resistance around the 70 and then 200-day moving averages. From there, a drop back to new lows would be ideal on the next swing down with the 45-day component, which - if seen - would be the odds-on favorite to trough the larger 180/360-day cycles.

The chart below shows the next larger wave, the 360-day cycle component:

For the bigger picture, the current downward phase of the aforementioned 180 and 360-day cycles should also end up as the bottom for the 'mid-term' year pattern (inside the presidential cycle), one that has a strong history of recording major price lows for the SPX. Once the 180 and 360-day cycles do bottom out, a rally of 33-38% or more would be expected to materialize in the months to follow, ideally lasting well into next year - before an even larger-degree peak attempts to form.

Jim Curry
The Gold Wave Trader

http://goldwavetrader.com/
http://cyclewave.homestead.com/

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Jim Curry became involved in the markets as an investor in 1988. In the early 1990's he stumbled upon a book/methodology that would change the way he looked at the markets forever. That book was J.M. Hurst's the Profit Magic of Stock Transaction Timing. Hurst's concepts seemed to make perfect sense to Jim, and he has spent the years since coming up with his own cycle/technical analysis methodology.

In 1998 Jim put his cyclic methods to the test by entering the Etrade national options-trading competition, twice (his only two entries ever into the competition). In the first contest he finished in the top 10 out of over 150,000 entrants; in the second entry into the same contest, he just narrowly missed finishing in first place - over quadrupling a $100,000 account in the contest's short time span.

What you are seeing when you view my market reports is a collection of over 30-years of experience in both numeric analysis and spectral methods - and in actually trading the methodology for myself and for the subscribers of my Gold Wave Trader (which covers Gold) and Market Turns (covering U.S. stocks) reports.

You can visit his websites at: http://goldwavetrader.com/ and http://cyclewave.homestead.com/


Gold was first discovered in U.S. at the Reed farm in North Carolina in 1799, a 17-pound nugget.
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